What is Considered Marital Property in a New York Divorce?

When filing for divorce, one of the most important considerations is each spouse’s right to certain property and assets. To better understand what is considered marital property and the equitable distribution of assets, continue reading and consult with a qualified attorney at Dow Divorce Law today.

What is Equitable Distribution?

In a New York divorce, the court follows the principle of equitable distribution. This means that property is divided in a manner that is fair and just, but not necessarily an equal 50/50 split. When determining how to allocate marital assets and debts fairly between the parties, courts consider various factors, such as the length of the marriage, each spouse’s direct and indirect contributions to the marriage, their income and property, and their probable future financial circumstances.

Before this distribution can occur, however, all assets and debts must be classified as either marital or separate property.

What’s the Difference Between Marital and Separate Property?

Marital property generally refers to property acquired by either or both spouses during the marriage, regardless of whose name appears on the title or account, while separate property generally belongs to only one spouse. Only marital property is subject to distribution between the parties during a divorce, while separate property generally remains under the sole ownership of one spouse.

What is Separate Property?

Separate property is generally defined as assets that are not subject to equitable distribution and remain with the spouse who owns them. This typically includes:

• Property owned by a spouse prior to the marriage
• An inheritance received by one spouse
• A gift given to one spouse by someone other than the other spouse
• Compensation awarded for certain personal injuries
• Property designated as separate in a valid prenuptial or postnuptial agreement
• Property purchased with clearly traceable separate funds

What is Considered Marital Property in a NY Divorce?

Marital property generally includes all assets and debts acquired by either spouse during the marriage, regardless of whose name appears on the account, title, or deed. It is based on the concept that assets obtained during the marriage were accumulated through the combined efforts of the couple.

Common examples of marital property include:

• The marital home and other real estate
• Checking and savings accounts
• Retirement accounts, pensions, and employment benefits
• Businesses and professional practices established or grown during the marriage
• Stocks, investments, and deferred compensation
• Vehicles, furnishings, artwork, and other valuable personal possessions
• Debts accumulated during the marriage, such as loans or credit card balances

How Does Commingling Impact the Classification of Property in a Divorce?

It is important to note that the distinction between these categories can become blurred through a process called commingling. This occurs when separate property is mixed with marital property, such as when inheritance funds are deposited into an account containing marital funds.

Commingling can create a presumption that separate property became marital property, but that does not necessarily mean the asset automatically loses its separate character in every case. A spouse may be able to establish a separate-property claim by tracing the asset back to its separate source with sufficient evidence. Because classification can depend heavily on financial records and how the property was handled during the marriage, an attorney can help determine whether an asset remains separate or is subject to equitable distribution.